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# The Most Important Technical Indicators for Binary Options

Consider the following bets:

• Pay $45 to bet gold will be above$1,700 at 1:30 p.m. today. Get $100 ($55 profit) if you win, lose $45 otherwise. • Receive$81 now to bet the NASDAQ 100 will drop below 8600 at 2 p.m. today. Keep a profit of $81 if your prediction comes true. If not, lose$19.
• Pay $77 to earn$100 if the USD-JPY exchange rate rises above 108 at 3 p.m. today; you lose $77 if it doesn’t. Welcome to binary options. All or nothing, one or zero, these titles are available on Nadex. Binary options allow traders to make time-limited conditional bets on predefined values ​​of stock indices, currencies, commodities and events. Like a standard exchange-traded option, each binary option has an option premium ($45, $81, and$77 in the examples above), a predetermined strike price ($1,700, 8,600 points, and 108 yen) and an expiration (1:30 a.m., 2 p.m., 3 p.m. today). The differentiator is the settlement price which remains fixed at$0 or $100, depending on which option condition is met. It keeps the net profit (or loss) fixed. The option premium also remains between$0 and $100. (Related: Binary Options Trading Guide.) ## Calculate the probability Since binary options are time-limited and condition-based, probability calculations play an important role in the valuation of these options. It all boils down to “What is the probability that the current gold price of$1,220 will rise to \$1,250 or higher within the next four hours? Determining factors include:

• Volatility (how much, and is it enough to cross the threshold/strike price?)
• The direction of price movement
• Hourly

Technical indicators suitable for binary options trading should incorporate the above factors. One can take a binary option position based on detecting continuous momentum or trend reversal patterns. Let’s look at some of the popular binary options technical indicators.

Comprised of three lines, namely ADX, DI+ and DI-, and their relative positions, Wilder’s Directional Movement Indicators (DMI) Average Directional Index (ADX) aims to capture the strength of an already identified trend. . Below is the trend interpretation chart.